PE / Private Equity
A Private Equity sale is similar to a Trade Sale, except the entity making the acquisition is an investment fund. More commonly, it may be a trade sale in which the acquiring company is backed by PE investment.
Entrepreneurs Hub provide expert support for business owners throughout the process of a PE sale. From exhaustive research to identify a list of PE firms most likely to invest, to seasoned negotiation of the final deal, we are constantly driving the process forward, advocating for you and your business at every step. Working in partnership with you from day one, our experienced team guide you in preparing for sale and positioning your business to achieve your aspirations, whether that is achieving maximum value, securing the future of your team or helping you take the business to the next level.
A Private Equity (PE) sale involves selling all or a portion of your business to a private equity firm – a type of investment company that acquires and grows businesses on behalf of investors. PE firms typically:
Invest in established, profitable businesses
Use a mix of their own capital and debt
Aim to grow the business over 3–7 years, then exit (e.g., through resale or IPO)
You can sell a majority stake (giving them control) or a minority stake (while retaining significant influence).
Key Benefits
FAQs – Private Equity
What does a Private Equity Sale mean when selling a business?
A private equity sale means selling all or part of your business to an investment firm that specialises in buying and growing companies. Private equity investors typically aim to increase the company’s value over time before selling it again.
These transactions often involve the existing management team continuing to run the business. In many cases, founders retain a minority shareholding so they can benefit from future growth alongside the investor.
What is a Private Equity Firm and what do they do?
A private equity firm is an investment company that buys stakes in businesses with the aim of increasing their value over time. They provide capital, strategic guidance and operational support to help companies grow.
Private equity investors often work closely with management teams to expand into new markets, improve efficiency or make acquisitions. After several years of growth, they typically exit the investment through a sale or listing.
Read more to find out what they do in plain terms.
How does a Private Equity investment work when selling a business?
A private equity investment usually involves selling a majority or minority stake in your business to an investment firm. The founders often remain involved in running the company while the investor provides capital and strategic support to grow the business.
Private equity investors typically aim to increase the company’s value before exiting the investment through a future sale.
Can a founder stay involved after selling to Private Equity?
Yes, founders often remain involved after a private equity investment. Many deals allow owners to retain a minority shareholding and continue leading the business while working alongside the investor to drive growth.
This structure allows founders to benefit from a future exit when the business is sold again.
How long do Private Equity firms hold investments?
Private equity firms typically hold investments for around three to seven years. During this period they focus on growing the business through expansion, operational improvements or acquisitions before exiting through a sale or recapitalisation.
What are the downsides of selling to Private Equity?
One downside of selling to private equity is that investors typically expect strong growth and performance after the transaction. This can involve increased reporting requirements, strategic changes or pressure to scale the business.
Private equity firms also plan to exit their investment after several years, usually through a future sale or recapitalisation. As a result, owners may continue working in the business as part of the growth strategy.
Read more to find out the main drawbacks of private equity.
Is selling to Private Equity a good idea?
Selling to private equity can be a good option for business owners who want to realise value while continuing to grow the company. Many deals allow founders to retain a stake and benefit from a future exit.
Private equity investors can also bring capital, strategic expertise and acquisition opportunities that accelerate growth. However, the structure of the deal and long-term expectations should align with the owner’s personal and financial goals.
For further insights Read more…